The snap general election and the Brexit negotiations will undoubtedly cause fluctuations for UK property prices, however, recent research indicates a strong growth in house values by 2021.
A new report from the Centre for Economics and Business Research (Cebr) has forecasted that the average home in the UK in 2021 will be worth approximately £272,000 and see a 23.6% or £52,000 rise in value across the next 4 years.
The triggering of Article 50 is expected to have an effect on house prices and could result in both positive and negative fluctuations in values, however, prices are also predicted to sustain strong growth over the 4-year period, due to the continuing housing shortage in the UK.
Author of the report and economist at Cebr, Kay Daniel Neufeld commented on the recent report and the UK property market’s health stating that “towards the end of 2016 indicators pointed to a stabilisation in the housing market, a trend that has continued in the first months of 2017."
Neufeld went on to say “Transaction numbers are slowly recovering from the introduction of a stamp duty surcharge on second homes in April 2016, which has led to considerable distortions in the market. Mortgage approvals, are nearing post-crisis heights, boosted by low interest rates and favourable borrowing conditions.”
According to Cebr, property values saw an 7.5% increase in 2016 and although they expect the Brexit negotiations to cause a slowdown in growth over the next 2 years, Cebr estimates annual increases just short of 5%. Once the results of the negotiations have settled and the market returns to the norm, Cebr predicts a 5.7% increase in value across 2019 followed by a 6% annual increase throughout 2020 and 2021.
Some property experts suggest we could see stronger growth than predicted, CEO of HouseSimple.com, Alex Gosling, said that “The UK property market seems to be Brexit-proof,”.
Gosling continued “House prices are still being supported by a lack of property stock and although buyers are taking longer before committing, now that Article 50 has been triggered, any reservations about making a purchase may ease. It wouldn’t be at all surprising if house price growth beats expectations this year.”
